Monday, August 15, 2011

The White House plans to unveil new proposals for job creation in September, the New York Times said yesterday. The debate in the White House is over how ambitious those programs should be.

Chicago's own William Daley, President Obama's chief of staff, wants Obama to stay on the "pragmatic" road, according to the NYT's sources. Daley and Obama's senior adviser, David Plouffe, are counseling the president to propose ideas that can pass Congress—free trade agreements, better patent protections for inventors—"even if they may not have much economic impact," the NYT said, because they feel it makes him more electable.

Others in the administration, including Obama's chief economic adviser, Gene Sperling, favor a bolder approach: Obama should propose ideas that could significantly improve the economy—and soon—but that would require a new round of stimulus spending.

Congressional Republicans would almost certainly block anything requiring more spending. Then the lines would be clearly drawn for voters in 2012.

"So far, most signs point to a continuation of the nonconfrontational approach—better to do something than nothing—that has defined this administration," the Times said.

The NYT story "provides confirmation that politics is driving economic policy in the Obama administration—and driving it in the wrong direction," John Cassidy observed in his New Yorker blog yesterday ("Wrong-Way Corrigans in Charge at White House").

"Even after the recent sell-off on Wall Street, the political geniuses at the White House don’t want the President to push for something that might actually give the economy a boost before next year’s election," Cassidy wrote, "because it would involve taking on the Republicans, and voters don’t like political strife." Those political "geniuses" don't seem to be doing so well, Cassidy said; the President's job disapproval ratings have climbed over 50 percent, and historically, anything over 40 percent has been "generally considered terminal," he noted.

Cassidy had already described, in the current New Yorker, what a bolder jobs approach might include: investment in infrastructure projects, a national community service program, and a version of a job-sharing program used in Germany (in which big employers trim some workers' hours instead of laying more workers off, and the government helps make up the pay difference). "Most of these things would involve the federal government's borrowing and spending more money," Cassidy wrote, "but that, of course, is what governments are supposed to do in an economic downturn."